The Germans are called to vote on September 26 in the first elections of the already christened “post-Merkel” era. After 16 years in power, Chancellor Angela Merkel is not up for re-election. However, for Berliners, that September 26 will not only be electorally important because it represents a farewell to the still head of the German Government.
This is how the rent cap law works in Berlin that lowers the rent to tenants
The German capitalists will also vote in their local elections and, in addition, they will pronounce on the successful campaign today ‘Expropriate Deutsche Wohnen and Company’. This initiative, launched in 2019, has obtained the signatures of Berliners necessary to organize a referendum in which they vote on whether or not to expropriate companies that own more than 3,000 homes on land in the capital.
The campaign bears in its name that of the real estate firm Deutsche Wohnen, which has 110,000 homes in the German capital. The objective of the activists is to take over 240,000 flats today in the hands of large owners.
Last July was set the date of September 26 for the celebration of the referendum, after confirming that the activists of the initiative had gathered enough signatures to go ahead with the vote. They far exceeded, according to data verified by the authorities, the 183,700 signatures required to organize the vote.
“There are technical details to be finished, but the referendum is on September 26,” he tells elDiario.es Ingrid Hoffmann. The activist of the Berlin initiative mentions some last-minute responsibilities that she and her colleagues have yet to assume from ‘Expropriate Deutsche Wohnen and Company’. For example: the printing of brochures about the referendum that they have to send to every Berlin household.
Hofmann explains that the group also fights with the authorities to stop them stating “how astronomical” will be the payment of compensation to expropriate the houses of the large owners. German newspapers are full of such estimates these days. The call has also reached the influential Financial times. “My flat is now a commodity,” lamented the activist Lorena Jonas, one of the promoters of the referendum, described as a “radical campaign” by the British newspaper, which warned that the polls suggest that almost half of Berliners support the initiative and it “could set a precedent for other high-income cities.”
Those who most oppose this measure – such as Sebastian Czaja, the leader of the liberal party, the FDP – speak of a cost of no less than 36,000 million euros. The Government of the capital places the total costs at an amount that ranges between 29,000 and 39,000 million.
These numbers often serve to convey the idea to the population that the Hoffmann and company project is out of the reach of the Berlin authorities. Berlin, capital as it may be, is still a city, at best, on a very tight budget. But in ‘Expropriate Deutsche Wohnen and Company’ they defend that the expropriation mechanism will not weigh down the capital’s accounts.
“The Berlin budget will not be affected at all,” says Hoffmann. “Because you have to create a public entity to gather the resources with which to get the 240,000 flats, issuing debt bonds. That is what allows you to obtain money as in a loan but without asking for money from the bank. Then, the payment of the renting these flats will allow you to return the money, “explains the activist. “This, our adversaries never mention it”, abounds the activist in conversation with this medium.
The Constitution as a pillar of the initiative
What is not lacking among those responsible for ‘Expropriating Deutsche Wohnen and Company’ are the references to article 15 of the German Basic Law, which is how the Constitution is known here. “Land, natural resources and the means of production can be transferred to common property or other forms of common economy for socialization purposes through a law that regulates the nature and scope of compensation,” reads the said article of the German Magna Carta.
If there is a majority of “yes” in the referendum, the result will not directly imply expropriation. Politics will have to act accordingly by legislating and, from what the Berlin City Council shows in its campaigns, translating expropriation into legislation will not be easy. Just the party Die linke, who is situated furthest to the left of the German parliamentary spectrum, clearly supports the initiative.
In the Social Democratic Party of Germany (SPD), the formation of the current mayor of Berlin, Michael Müller, and the favorite to win the race for the Berlin City Council, Franziska Giffey, do not contemplate expropriation. In The Greens, the second largest progressive party, they speak of ‘Expropriating Deutsche Wohnen and Company’ as a “last resort” in the face of the tense situation of the real estate market in the German capital.
Rising prices, housing shortages and mergers of large companies
Berlin, a city governed by a left-wing coalition led by the Social Democrat Müller, is one of the cities where rental prices rise the most, according to a recent study by the Internet real estate platform Inmmoscout24. In the increase that will be registered in the capital in 2022, of 5.7%, according to the estimates of that portal, it will play an important role that the so-called ‘Rent Cap Law’ will be declared unconstitutional for competency reasons. The regulation managed to lower rents considered excessive.
With that measure, what Die linke and The Greens want to see it applied throughout the country and not just to one city or region, the Berlin authorities tried to deal with the housing shortage that exists in the Teutonic capital. It is estimated that 40,000 new homes are needed in Berlin each year. In 2020, 16,000 were built when they wanted to build 20,000. In general, Germany does not build enough. Hence, the economic press considers that Merkel’s ‘grand coalition’ government has failed in housing.
This is the context in which ‘Expropriate Deutsche Wohnen and Company’ has emerged and in which also Deutsche Wohnen and Vonovia, two of the major players in the German real estate market, want to merge. If that happens, the activist Hoffmann believes that it will not be a hindrance to her initiative. “They have been three attempts to merge. Perhaps, together, these companies feel more secure forming an even more powerful company. But for us, in an expropriation, that two companies become one means less paperwork,” he says sarcastically.
She is confident that on September 26, on a day in which a vote will be taken to reconfigure the Bundestag, the federal government and the Berlin City Council, there is a high participation. According to his accounts, from a 70% stake, he will win the “yes” in the referendum on ‘Expropriate Deutsche Wohnen and Company’.